"Meaningful Tailwinds" To Push Stocks Higher Over Coming Months? | Darius Dale

Summary

• Market Regime: The guest sees a sustained risk-on environment, with tailwinds from growth, monetary policy, and liquidity, favoring rotation over a broad market top.
• Convergence Trade: He is actively pitching a multi-year rotation into international equities, small caps, and cyclical stocks as AI diffusion drives productivity, margins, earnings, and valuation convergence outside mega-cap US tech.
• AI Diffusion: AI is framed as a broad-based catalyst elevating productivity and profitability globally, accelerating a productivity boom that benefits under-owned non-US markets and cyclicals most.
• Policy Tailwinds: A rare combo of fiscal easing, monetary easing, and bank deregulation (Paradigm C) underpins above-consensus real GDP growth and supports risk assets.
• Key Companies: Examples cited included NVIDIA (NVDA), Microsoft (MSFT), Salesforce (CRM), and Block (SQ) to illustrate rotation away from crowded mega-cap tech and AI’s labor impact.
• Core Implementation: He favors the global equity ETF VT for equity exposure, alongside a structural allocation to gold and a tactical allocation to bitcoin within his KISS model.
• Opportunities and Risks: Upside seen in international/small-cap/cyclical assets; near-term risks include choppy factor rotation and crowded positioning, while AI-driven labor disruptions loom longer term.
• Overall View: Expect investors to be satisfied by year-end, with those tilted to the promoted themes (international, small caps, cyclicals) likely outperforming traditional mega-cap-heavy allocations.

Transcript

If you think about the growth cycle, you know, the the indicators that we uh uh track across the growth cycle are currently suggesting that we, you know, we have a meaningful tailwind for risk assets right now. Uh monetary policy suggests we have a modest tailwind for risk assets right now. And the liquidity cycle suggests that it's a modest tailwind right now. So that's all positive. By the end of this year, investors will likely be satisfied with their returns in equities and credit. And investors who have international equities, small cap equities, and cyclical equities will be much more happy with their returns than the investors who kind of stay put in, you know, the cues. Welcome to Thoughtful Money. I'm Thulful Money founder and your host, Adam Tagert. Welcome you here for a very special interview. So, uh, if you look at the S&P, folks, the S&P basically is at the same price today that it was before Halloween of last year. So, a lot of investors are asking a question. Is this sideways market action that we've had for this many months now? Is that the market consolidating before it regroups and then heads to new highs, or is this a topping out process in the market? I cannot think of a better person to ask this question to than CEO of 42 Macro, the great Darius Dale. Darius, thanks so much for joining us today. >> Adam, it's always such a pleasure to be here with your wonderful community. Uh I'm not great. I'm just a guy who works hard with the Bloomberg and uh produces some great outcomes for our customers. Man, I'm really really blessed to be here. Thank you. >> Uh well, look, I I I think great is actually an understatement when it when it comes to you, Darius, on so many dimensions. Um even personally, which we're going to get to in just a second. Um but very quickly, we'll talk more about this later in the discussion, but I want to make an important announcement here for folks. Um I spent a lot of time communicating with the thoughtful money audience u both through comments, emails, uh live events, um but also through surveys, and I know through our survey work that the vast majority of the people who watch these videos are self-directed, do-it-yourself, you know, DIY investors. And you know, a lot of what I do on this channel is is advise people. Hey, if you want some help, uh, go work with one of the financial adviserss that I have on this channel often. Um, and that that's definitely, I think, a very valued experience for the people who are looking for guidance, um, and some handholding there. Um, but for the majority of people who are watching this channel, what they're really looking for is, hey, what information or what tools and services and solutions can you be providing to me to help me be a better DIY investor? So, I'm very happy to announce that Darius's firm, 42 Macro, is now the official endorsed DIY solutions provider for thoughtful money. And we'll tell folks a little bit more about that that near the end. But Darius, I I I just it's it's such a privilege and honor to have uh your partnership on this. >> The privilege and honor are all mine, sir. Um you know, when we met a few years ago, you know, I immediately fell in love with you, man, in terms of who you are as a person. I can tell that you care about the people you're serving in your community. Uh and that's something I'm very passionate about. Um, you know, I left my, you know, cushy, you know, expensive Wall Street job, uh, a little bit over a half decade ago, I guess, to start 42 macro, uh, basically on the same premise that you started thoughtful money with, which is you want you exist to narrow that information asymmetry >> between the buy side and and the general investing public. Um, and as someone who's from the, you know, the very very very very bottom of the K-shaped uh, US economy, as you know, been homeless on many occasions, you know, slept in vans, you know, eating food, thousands of meals from food banks throughout the course of my life, you know, it it it really didn't sit well with me, you know, as I, you know, kind of spent the first 12 years of my career, you know, essentially making rich people rich, you know, with my research and risk management uh, uh, signals. And so, you know, we started 42 macro a little bit over a half decade ago to essentially, you know, to to correct that, you know, correct something that was really important to me from a mission standpoint, which is to narrow that information asymmetry. You know, we we serve many of the top institutions across the global buy side here at 42 macro, uh, folks I've had long-standing relationships with. And you know it's really clear to me that that asymmetry you know very much exists from a resource standpoint >> exists from a experience standpoint. The asymmetry exists from a educational standpoint just median investor media investor in both cohorts and it also that asymmetry tends to exist from an emotional uh standpoint EQ standpoint with regards to financial taking financial market risk. And so, you know, we built a variety of systematic tools and signals uh in our toolkit uh here at 42 macro to essentially elevate the, you know, the investing behavior, the habits of of of the general investing public so that that asymmetry is narrowed. We're lifting uh the the you know, the kind of the floor if you will and the habits if you will uh of the general investing public towards that of our uh byside clients. And so we're really proud of this, you know, the the the solutions we've built. We're really and more prouder of the, you know, incredible impact that we've had for thousands of investors in 80 plus countries around the world. Um, you know, the the testimonials we get, you know, in response to our research and our signals is life-changing for me. Uh, because it lets me know that, you know, we're accomplishing our mission, which is very important to me. So, thank you again, Adam. Thank you to the thoughtful community for humoring us. Come check us out. We look forward to you, uh, checking us out. And, uh, just want to say I'm very, very excited for this, man. Let's let's dive in. >> Well, thanks. And you couldn't have done a better job of of demonstrating why you know I came to to select you as a partner here just in terms of your integrity, your mission. Uh but also the performance uh of your results and uh we've got a lot of I mean I know there already a lot of happy 42 macro subscribers in this audience. Um hopefully Darius or I expect that we're there probably going to be a lot more now that this uh partnership is is official and and public there. Um, and folks, if you haven't had experience to Darius's uh tools and work, um, you don't just have to take my word for it here. We're going to walk through a lot of his material in the course of this discussion. So, you're going to see firsthand exactly what we're talking about. Um, but folks, we'll talk again a little bit more about the the how to get your hands on all this stuff uh near the end. Uh but the shortand is just go to thoughtfulmoney.comdiy fill out the very short form there and you'll be sent to the 42 macro uh experience and you'll get all the information and all the direction about how you could potentially sign up for their services if they turn if they look like they're going to be a good fit for you. Um all right Darius very excited about the future here. Um let's roll up our sleeves here and get to the heart of the matter. So, in the intro, I mentioned this big question that's being batted around right now, which is the market just seems really stuck in neutral. Where's it going to go once it gets into gear? Are we going to get to new highs on the S&P going forward or is this a potential topping process? So, why don't we start there? What's your how do you want to tackle this? >> Yeah, that's a great question. Uh, in our view, we do not believe that this is a topping process. Uh, you just look at a variety of our signals. Uh so we one of the things that we do uh is now cast the market regime that's sort of our northstar in terms of filtering those signals to uh retail investors via our kiss model portfolio into institutional investors via our discretionary risk management overlay across 70 different factors and we currently remain in a pretty reasonably high conviction uh goldilocks market regime which is a risk-on regime uh where investors generally get rewarded for uh increasing uh the risk in their in their portfolios. And so uh this what appears to be a topping process in US equities is very much not a topping process in international equities. It's very much not a topping process uh in US equity factors that have sort of been left for dead by the mag seven constituents small caps cyclicals things of that nature. And so when we look at our market regime outcasting process those signals we look at the factor leadership and the factor rotation uh underneath the markets in terms of the internals in our view this is not a topping process what is more likely occurring which is something we've been calling for since November 4th which is chop we have a you know starting back in early November we observed a historic degree of crowded bulls positioning in in financial markets uh uh particularly in the you know the crowded Mac7 type you know core uh uh elements of most investor portfolios when you think about mega cap tech, mega cap US tech. Uh and that historically crowded business positioning has led to a lot of um violent unwind if you will at the single stock level and at the uh at the factor level as well. If you think about software stocks or some of the uh you know Nvidia type type companies and so in our view we don't you know this is not necessarily a indication that markets are topping. In our view we're just we just think this is a you know run-of-the-mill diversification trade where more of a a rotation of capital from one part of the market to another. >> Yeah, investors are simply using max 7 as a source of funds to capitalize other businesses and we'll talk about why in a moment. >> Okay. So, um you mentioned regime, so we'll get to what regime your model says we're in right now. Um, but real quick, do you expect this when you say chop, is it more sort of a sideways, you know, capital was in the hyperscalers, now it's going elsewhere, or do you expect kind of a sloshing back and forth uh through this year? Because there are some value companies now that are pretty richly priced. I mean, it's almost hard to call them a value company because they're trading at such big PE multiples. >> Yeah. Yeah. Walmart, I guess I don't know, Walmart's a value company, but they'll tell you they're not. But yeah, you think about a company like that. Yeah, for sure. uh in our view we think this rotation trade is is is is durable. Uh and I'll tell you why. Um so if we go towards the uh end of our presentation here where we show uh some of our our views on this this sort of this this this this what we're call we've been calling it a convergence trade if you will. And so there's there's sort of two primary drivers of this rotation from MAG 7 to cyclicals to small caps and and most notably in our our opinion international stocks. There's two primary drivers of that. One, we have we believe that we are in a secular bare market in the US dollar primarily as a function of the geopolitically driven supply demand imbalance in the Treasury debt market. Um that that's something that we've discussed you and I Adam on this program on several occasions over the last few years. uh and so that is ongoing. But another feature uh that is developing right now and really picking up steam is this AI diffusion theme. And this AI diffusion theme from our perspective and I think we have a slightly differentiated view on this relative to consensus is we see AI diffusion as a convergence catalyst as a catalyst for convergence. A catalyst for convergence and productivity across sectors, industries and geographies. A catalyst for convergence in profitability across sectors, industries and geographies. A catalyst for convergence in earnings growth across sectors, industries and geographies. And ultimately a catalyst of convergence uh in valuations across sectors, industries and geographies from MAG7 core meggaap US tech into the other factors that investors have largely, you know, stayed away from for for you know most of my career which began in the global financial crisis. >> Okay. And I'm curious with this convergence is it uh you know the the the production productivity and profitability of the outer favor parts of of the the sectors catching up with the mag seven companies or is is in any way do is there expectation that that the mag 7 may actually come down in terms of productivity and profitability? No, no, no. This is a this is a rising tide lifts all boats. But from a just just a mathematical standpoint and this is where we the core of the convergent thing comes from >> the companies, the industries, the sectors and the geographies that have a lower comparative base for productivity for margins and ultimately earnings will have a faster growth rate if you shock them with the same catalyst and the same catalyst is AI. Um, you know, again, coming from a lower comparative base, you're going to have a faster growth rate. Uh, so we want to look at this from a productivity growth. You know, we look at uh revenue per employee, the year-over-year rate of change of that, uh, for the Msei US index, Eurozone index, UK index, Japan, China, and then the all country uh, world uh, index, XUS. Uh, and again, we're looking at revenue per employee is not apples to apples to productivity, but you don't really get timely productivity statistics across all the geography. So in order to to standardize the analysis you know we see that the US has been extremely productive growing above trend in productivity growth from the perspective of this metric uh uh for several years and and at 7% it's demonstrabably outpacing most of the world Europe at minus 2.2% the UK at minus 9.2% Japan's um they've had some corporate reform there over the past few years so they're mirroring a lot of what we've seen in the US but US outperforming China at 6.2%. And so ultimately you you see this there's an opportunity here for for the rest of the world to catch up or at least the delta the magnitude of the change from where they are currently will exceed the magnitude of the change from where the US is currently. They're all going up. Productivity is make no mistake about it. AI is going to raise productivity across uh you know many sectors, industries and geographies. And in our opinion we think the international component of that is where you're going to see the biggest bang for your buck. Um, if we look at this in profitability terms, if we look at the trailing 12-month operating margin, US is far and away, you know, besting the rest of the world at 15%, Europe's at 12.4%, uh, the UK's at 12.6%, Japan's at 10.1%, China's at 12.5%, and then the global equities are at 13.3%. So two somewhere between two to 500 basis points of potential convergence in margins as the rest of the these as this cohort catches up uh to the US. Uh when we look at this in earnings uh growth terms uh what we look at are earnings estimates. So if you look at the next fiscal year estimate according to Bloomberg consensus we're US is expected to grow earnings at 15.3% above trend whereas you you look at the euro zone it's only at 4.9% 2.7% for the eur uh the UK 13.7% for Japan 6.9% uh for China and so ultimately if we're correct that the diffusion of AI throughout the global economy and the ongoing uh secular bare market uh in the US dollar uh continue then ultimately you're going have this productivity feeding into into faster margin or into wider uh margins which ultimately feed into faster earnings growth expectations uh for these international companies and and cyclical factors where a lot of investors really just don't have meaningful allocations to yet uh in their portfolios. And the final thing I'll say on this uh is on valvaluation. And the reason this is such a in our opinion such a high conviction view is that you can just tell just from looking at these relative valuations that investors don't have meaningful allocations to international stocks to small cap stocks to uh cyclical broadly speaking in their portfolios. US on a so these indices are all a bit different in terms of their composition. So you have to find a way to standardize them and one of the ways with which we do that is looking at the enterprise value to next 12-month ibida uh ratio. You can't really look at pees because you know again you have different uh compositions. Some businesses are some some indices are asset light some indices are asset heavy obviously they have different sectoral compositions. you know you a lot of tech exposure here in the US and so P is not a great apples to apples uh uh metric to look at across geographies but enterprise value which does normalize uh for the asset light or asset heavy nature of these indices uh does and so if you look at the enterprise value to next 12 month ratio at 17.9 uh for the US demonstrabably outpacing that of the Euro zone at 11.6 the UK at 8.9 Japan at 9.9 China's a bit expensive at 14.4 four, but still way below the US. And then global equities are at 11.2. So again, very clear indication that investors aren't here yet. There's a meaningful catalyst in terms of the diffusion of AI that's likely to cause a convergence uh in a lot of these metrics. And so ultimately, we think this is a trade that could last for many years in our opinion. >> Okay, great. I was just about to ask that. So we saw international markets start to outperform the S&P last year. Um, and you know, some might say, well, okay, >> international stocks had their had their run here. You're saying, hey, no, we think this could run for a good while, perhaps years. >> Yeah. Yeah. I mean, again, if you're investing on the basis that every day, week, or month, that you have to be right on some fundamental theme. I'll tell you right now, you're investing poorly. You're going to have bad results. >> You you have to understand that this is a multi-quarter, multi-year theme. And so, you know, if you if you give yourself enough time and space to allow the theme to play out, you check in every six months, every year. In our view, we think every six months to a year, you're going to realize that international equities uh you know, and some of these um you know, kind of left for dead factors within the US equity market like cyclicals and small caps are likely to continue outperforming. I mean, you go back to the when we highlighted the crowded historically crowded degree of bullish positioning back in um back in November in early November. Not only was it historically high degree of crowd bull positioning, but it was all in the same factors and stocks. And so in our view, we just think that Max 7 is unfortunately going to be for a lot of folks who are, you know, overweight. this this factor still it's just going to be a source of funds as investors more and more investors realize that the the the rate of change the speed of of of earnings growth the speed of productivity growth and ultimately the the speed of the margin expansion is faster in international uh equities and faster in in small caps and faster in cyclicals. Um, again, the rate of change, not the levels, the change is what matters to markets, >> right? And and that's meaning that if you're looking for stock price performance, the things that are changing the fast were likely going to have the the biggest change in their stock prices. >> Bingo. >> Yeah. >> Bingo. >> Okay. Um, and and again, just to put this in really simple terms, essentially you're saying, look, we've been promised for, you know, the past couple years that AI is going to really change the game. We've had a lot of hype to date and obviously the hyperscalers have made a lot of money because that's where the the money was being spent, you know, buying Nvidia chips, building data centers, stuff like that. You're now saying we're now starting the era where the corporate world is going to start seeing productivity and profitability gains from AI. It's very real and we're likely going to see the impact of those gains most internationally and in cyclicals and small cap. So that's where you want to be leaning into. >> Yeah. not not not going to we are we are we definitely seeing it I mean this is we are in the middle of a productivity boom whether folks want to admit it or not uh so if you look at productivity growth right now you know we're growing on a quarter of a quarter star basis at 4.9% productivity um growth if you look at this on a six-month annualized basis it's somewhere around 4.5% I mean these numbers you know we're not going to stay at five to you know four to 5% productivity growth but the key takeaway from our analysis which is in our opinion pretty pretty robust on this particular topic is we're the US is transitioning from a 1.5 to 2% trend productivity economy to a 3% trend productivity economy and we have historical precedent of doing this before pretty recently with regards to the uh diffusion of internet technology throughout the economy. If you go back to uh 1995, you know, when most folks, you know, say that's kind of the beginning of the internet technology diffusion or at least when it really meaningfully accelerated across, you know, industries and sectors, we were a trend 1.5% productivity economy. Whether you look at it on a quarter over a quarter star basis in the top panel or a year-over-year basis uh in the bottom panel by 2005 the trend in either statistic quarter over quarter saw or year-over-year was 3% on a trailing 10-year basis. So we went from again trailing 10-year basis of 1.5 to 2% trend productivity growth in 1995 to 3% by 2005. And again this is with internet technology. AI in our opinion is significantly more productive and productivity enhancing than internet technology. I mean you know this period here where productivity went from one and a half to two to three. We're talking about Napster and and MySpace and Ax G's and and you know not can we redo this entire business process andor uh develop code that puts this entire industry out of business. you know, this is a much more powerful technology in terms of enhancing the output power worked. Um, you know, especially in the context of the uh likely u depressing impact that we're going to see uh AI diffusion have on the labor market. You're just going to have less hours worked uh and more uh GDP. So ultimately, we think productivity growth is likely to uh trend higher if not explode in the coming years. >> Okay. And I want to talk with you here soon about the depressive impacts on the labor force. Um before we get to that though, um >> so uh um it it sounds like if I'm asking you to take the over under on GDP growth this year, you're probably going to take the over. Correct? Growth expect way over. Okay. Way over. And um we're talking just about AI right now, but if if you listen to the current administration um not just the president who obviously makes really big bold claims um but folks like Scott Bessant and Howard Lutnik and you know a lot of his cabinet advisers that are actually leading the charge and executing a lot of the economic policies they are telling a similar optimistic story. Um and uh they're definitely saying look you know we have spent 2025 laying a lot of foundational work to to boost the economy to drive um material new economic growth you know in this coming quote golden age right of America. Um, so how much of your your um confidence of hey I'm going to take the over on GDP uh is due to just the AI effect that we're talking about and how much if any is also due to you know the um uh deregulations the um the trade deals that have been struck, the foreign capital that's supposed to be coming into here, the tariff revenues, uh the tax uh extensions and and additional tax cuts. Um, you could make an argument those are providing additional serious tailwinds to economic growth going forward. Are you in that camp as well? >> We're in all the camps and that's what Paradise C is. And uh, you know, I think uh, last time I was on your program was at your fall conference, but the the the the previous uh, time was on I think it was I was on in June of last year uh, a couple of months after we had authored the paradigm C uh, theme. Um, so for those who may not be familiar with our foreturning inspired paradigm framework, paradigm A is the, you know, the geop the the advent of the geopolitically driven supply demand imbalance of the Treasury uh securities market. And so there sort of when you get to a certain level of debt to GDP or just debt in general in terms of the the the the the squee the impact that debt service has in terms of squeezing out uh uh um consumption and and investment, you know, once you get to that point, we call it the debt disease. There's only really three solutions. You can cut, you can grow, you can print. And so we saw the attempt to cut uh with paradigm B. That's what we call the cut phase of this of this, you know, threeprong sequence. Uh we saw that attempt with Doge and the and the tariff uh the liberation day um I would say fiasco last year. They pivoted very quickly out of that to trying to run the economy hot, the the growth phase, which is paradigm C. Paradigm D, which is in our view where we're ultimately headed with all this in the in the coming years, uh which is the print phase. um you know in our opinion uh paradigm D is is is is also uh uh quite bullish from a nominal GDP perspective but paradigm C is sort of the sweet spot from a real uh GDP perspective and so ultimately uh noticing that pivot uh and and Treasury Secretary Bess is a former client of mine and I understand you know I'm well aware that he understands a lot of what we're discussing today uh and is why they made the pivot ultimately you know we're we're currently experiencing a rare confluence of meaningful fiscal easing meaningful monetary easing and meaningful deregulation. It almost never happens. Um, you know, you you go back to probably the early 2000s is the last time we saw that confluence of of events. Meaningful fiscal easing, meaningful monetary easing, meaningful uh deregulation. Uh, obviously didn't end well in terms of creating a housing bubble and a global financial crisis. However, um you know, however, it did, you know, it did create some very positive outcomes in financial markets, particularly for international and small cap and cyclical uh factors uh in the equity and credit markets, which is exactly where we've been guiding our global investor community uh to participate in uh in recent months. >> Okay. Um, and I've been sort of reminding folks, um, that I' I've been deliberately asking a lot of experts like you, you know, will these fact these policy factors uh, add tailwinds, you're saying absolutely. And one of the things I'm trying to underscore for people is you don't have to like this, right? You might you might be against the current administration's policies, but when you do these things, when you fiscally ease materially, when you monetarily ease it materially and you deregulate, that just generally is bullish for the economy. >> 100%. I mean, you got to take your don't bring a politics knife to a investing gunfight. Like, you just can't do it. Look, you're we're in a fourth turning. you're probably everyone listening to me talk right now is probably going to get more disgusted by politics as we move forward in time. So if you allow that to cloud your judgment and ultimately um you know cause make cause you to make negative net present value decisions in your portfolio that's a that's a problem and you have to you have to elevate your investing habits to remove the influence of politics from that. Um you know if we can go back to kind of uh those three core drivers you know just a couple things to highlight on on on that. So we'll start with deregulation. In our opinion, you know, we people to throw around the word deregulation, but in my opinion, it's a very loose and squishy thing when we talk about it in from an investing standpoint because there's no it's hardly there's no time series for regulation or deregulation, right? So you have to figure out how it's actually impacting the economy. And from our perspective, the number one the biggest lever that uh Scott uh Treasury Secretary Besson uh is highlighting that the administration is pulling from the recet deregulation is bank deregulation. uh Nikki Bowman uh the Fed's chair for bank deregulation is very much in line with Treasury Secretary Scott Besson's uh drive to meaningfully deregulate the banks and we're already seeing it in the data. So this chart here shows commercial bank loans and leases which from a growth rate perspective had been left for dead for nearly two years from basically early 2023 all the way through early 2025. Well, if you look at the most recent growth rates, the commercial bank loans and leases are now growing 9.2%. 2% on a three-month annualized basis and 6.8% on a year-over-year basis. Both of those numbers are well above trend. Um the light blue dotted lines in these charts indicate the trend. The blue bars indicate the three-month annualized rate of change. The black line if there is a black line is the sixmonth annualized rate of change and the red line is the rate of change. So just remember that if you ever see these charts from us. >> And so we we were already breaking out from a multi-year consolidation if not you know kind of recession in bank credit growth. uh largely being driven by the large banks, but you're actually starting to see small banks get involved uh as well from an acceleration standpoint. So, in our opinion, this deregulation push is already having economic impact uh in terms of reflating uh the the economy. Uh another uh driver of this, you know, paradigm se while you're getting to your next slide. Um >> uh basically loan activity is I'm going to guess correlated pretty much on a one for one basis with economic growth. Uh it no not at all. No it's it's actually it's much lower than that. However you it's much it's a co-integration. So whenever you have above trend loan there the correlation is not high but the co-integration is but they are co-integrated. When you have above trend loan growth you tend to have above trend economic growth and vice versa. >> Okay. That's more or less the spirit of what I was asking. Yeah. >> Yeah. Exactly. Exactly. So um you know you can't use it you I wouldn't build a core a linear regression model with it but you can certainly use it to to anticipate uh going from an above trend or below from a below trend to an above trend condition in the economy which is exactly what we're calling for. Um um you know with with an expectation that growth is likely to come in at three perhaps even higher than 3% on a real basis here in 2026 which is 40% higher than what consensus currently expects. >> Wow. Okay. So you you're you're thinking the market still really has to wake up to what you've already sused out about what the future's going to be. >> Well, they're going to wake up or they're going to get woken up. >> Either way, >> they'll wake up one way or another. Yeah. >> Yeah. Exactly. Yeah. Either way, you know, if you if if you wake up in July and you're underperforming international equities and small caps by 20, 30 percentage points, then you know, they'll change their positioning then. I'm telling you here on February 27th, and I'm not sure when you're going to publish this, but we're recording on February 27th. I'm telling you here on February 27th that growth is likely to come in much faster than consensus expects on GDP which obviously create upside risk to earnings expectations uh both domestically and abroad. And going back to where we started the conversation, we just think the convergence factor with regards to diffusing AI throughout the global economy is likely to cause from a lower comparative base international equities and small caps and cyclicals growth rates to to the rate of change to be a greater magnitude than that of of of you know where the factors where everyone's already low. >> All right. Um, look, great and I'm I'm biting my tongue on a question around your KISS model and how you will play this through KISS, but We got more wood to chop and I think I interrupted you. You were gonna talk about inflation here. >> Yeah. No, no, no. I was just quickly highlighting sort of the three core pillars of Paradigm C. Again, when we pivoted took Paradigm C back in April, we recognized that the administration was beginning April of 2025, we recognized that the administration was beginning to to pull the levers of fiscal easing, monetary easing, and deregulation, which will ultimately when you put those three things together, you're going to wind up with an above trend growth rate uh in the economy. uh especially in the context of uh the uh upswing that we're the the cyclical and what we believe to be is a structural uptrend uh in productivity growth. So obviously another feature of of of of this paradigm C if you think about it as a three-legged stool with fiscal easing uh deregulation and monetary easing. Another leg of that stool is the monetary easing. Obviously, we've seen almost uh two whole percentage points of rate cuts, 175 basis points of rate cuts uh by the Federal Reserve, and we're still dealing with the lagged impact of that monetary easing filtering through uh the US economy. And by the way, the markets continue to price in two and a half rate cuts for 2026. Uh the Fed, you know, they're only at one rate cut for 2026, but we ultimately think believe that this our view on inflation, we talk about that shortly. Our view on inflation is that um the inflation uh dynamic is likely to to cool off, continue cooling off and ultimately the the labor market dynamic is likely to remain squishy if not get squishier in the context of AI which will give the Fed ample scope to eventually ease monetary policy again here in 2026. So you have that um that tailwind obviously the bank deregulation tailwind and then ultimately the fiscal tailwind is a big deal as well. Uh so one of the things that I think investors missed last year uh and was contributo to the slowdown in growth and ultimately contributo to the slowdown in the labor market was the fact that we saw a pretty meaningful fiscal retrenchment uh in 2025. Um you know we had uh so if you look at the budget deficit as a percent of nominal GDP on a calendar uh basis in 2024 it was 6.8% of nominal GDP. It narrowed 140 basis points uh to 5.4%. 4% in 2025. And and part of that narrowing was obviously the advent of terrors. We saw customs duties up 235 percentage points in 2025. And so that helped, you know, narrow the budget deficit uh a meaningful uh degree trans transitioning to you know fiscal uh 2026. So that which began in October. So we have four months of data for fiscal 2026. when you analyze the budget deficit on a fiscal year-to- date basis. So transitioning from calendar year to date to fiscal year today, we are now expanding and expanding materially. So on an annualized fiscal year-to-day basis in fiscal 2025, which ended in September, the budget deficit uh on an annual rather, the budget deficit was 5.7% of GDP. On an annualized fiscal year-to-ate basis with through the first trimester of fiscal 2026, the budget deficit is widened to 6.7% of GDP. So 100 basis point fiscal expansion. Uh, and so we have monetary easing, we have fiscal easing as a function of the one big uh, beautiful or ugly bill depending on what side of the political aisle you you live on. I could care less. I'm trying to make money. So, we have the the fiscal thrust from the from ABBA uh, as well as the monetary easing, the lagged impact of monetary easing plus the incremental monetary easing we're likely to get that's currently priced in as well as the ongoing bank deregulation dynamic. In our view, this expectation that growth is going to come in at, you know, 2.2% on average in in 2026 and 2027, in our view is roughly 40% too low. And until that delta converges, we we just think there's upside risk uh in uh in financial markets. >> Okay. Um let me ask you this just just on the um on the monetary side. Uh I guess the question is just what what are your thoughts on Worsh? Does he is he a material factor here or will he just be sort of continuation of what we've already done? Um you know he's kind of known as an inflation hawk. It sounds like you're not that worried about inflation here in the near term anyways. Um but what what do you think about Worsh as a nominee here and his impact on your outlook? >> Yeah. Uh to me I think that's one of the um one of the key questions in in all of global financial markets. Uh Kevin Worsh could potentially represent a sea change with regards to the Fed's reaction function particularly on its balance sheet policy. Bors has made several comments across multiple years now about the Fed's footprint in the economy and financial markets specifically as it relates to the Fed's bloated balance sheet. Um, you know, this is a comment that he made last year in May, uh, where he said that the B I would say the balance sheet is trillions larger than it needs to be. We can't make this change overnight, but if markets knew that our objective was to get the balance sheet, uh, that was as riskless as possible and as small as possible, we would get there in due time. And with the strategy, I think markets and market participants could well adjust to it. Now, this is, you know, relative to a lot of the non-basian narratives that, you know, still exist in the crypto asset class. >> That's a shot across the bound uh in our opinion. Uh and so you as an investor, I don't know that we know enough yet as it relates to Wars, you know, gumption when he actually gets in the seat, right? You know, because we see we saw we saw this tough talk out of, you know, of Secretary Vesset, respectfully. Sorry, Scott. We saw we saw this tough talk out of Scott Bessant uh with regards to the Janet Yellen's Dovish financing policy for over a year prior to him assuming the role of Treasury Secretary. >> Yeah. And then since he's became Treasury Secretary now he's back at you know kind of rubber stamping uh the policy if you want to look at um you know look at look at the in terms of u feds bills uh bills divided by total marketable treasury debt. I mean it's just been static at 20 22% for for years now. uh kind of taking the baton from from from from Jenny Yellen. So our fellow Yelli Janet Yellen. So I'd love to get us all in a room and have a chat about this at some point. Um so the key takeaway is you know Wars obviously was a pretty has been made some very hawkish comments with regards to the balance sheet um in recent years. Uh obviously $6.6 trillion that's a that's a long way to go down relative to where the Fed was kind of when Walsh was on the Fed balance sheet when he started the Fed you know kind of $1 trillion uh level. Again, this chart's in log scale, so that's a long way down. But I I think there's a silver lining here that I think investors are might be missing at the current juncture, which is two things. One, the FOMC is a committee. Worse is not going to be able to come in and strongarm the committee into doing things that that it doesn't want to do. So, he's going to have to create create some really credible cases for why uh to justify a lower policy rate in line with what he promised the administration, but also to support uh moving the balance sheet down. So, one of the things we think he can do uh in this regard is to to sort of piggyback or or if you will on this bank deregulation initiative because at the end of the day, the Fed can't meaningfully reduce its foot uh footprint in the economy and financial markets without causing a significant disruption in the economy and financial markets particularly through the uh repo market, the repo channel. banks for you know as a function of a lot of the regulation we've seen from a Basel standpoint and DoddFrank standpoint since the global financial crisis have that that regulation has caused banks to increase their demand for reserve assets. Uh and so the Fed has had essentially had to supply uh bank reserves uh in order for banks to to sort of not I guess tighten credit enough you know tighten credit in a way that um you know to increase their demand for reserve assets in a way that would ultimately tighten credit in the real economy. Well, so ultimately in order for the Kevin Walsh to thread the needle on reducing the Fed's footprint in the economy and financial markets, you're going to need to meaningfully relax bank regulation in a way that allows banks assets to grow uh meaningfully such that banks can now become the buyer of last resort for treasuries instead of the Fed because again we are still in an era where there is a geopolitically driven a persistent geopolitical driven supply demand and balance in the treasury securities market. So someone has to buy this paper and ultimately we think it's going to come come back to the commercial banking sector. So uh one final thing I'll say on this this comment if you look at the growth rate of commercial bank loans and leases or sorry not loans leases this is total assets now. So it includes loans and leases it includes u treasury and agency securities uh and and other uh dynamics. We're now at 7.6% on a three-month annualized basis 4.9% on a year-over-year basis. I mean, you know, these numbers are much faster than anything we had seen in recent years. Uh, and so ultimately, we think that, you know, this is this is the channel that they're going to use to uh, you know, kind of essentially shrink the Fed's footprint. And if they could do that really well, and we've seen there's ample scope in ample uh, history, time series history of this um, outcome in in the past. You go back to the early 2000s, commercial banks were 33% of the market for marketable Treasury securities. They're now down at only 15%. Uh the Fed at one point was 24 25%. They're now down at 14%. And so, you know, ultimately what we're essentially calling for is the red line, which is commercial bank share of the marketable treasury market uh to go up. The Fed's share probably flat uh over time. And as long as commercial banks are going up and foreign central banks are going down, you can probably slow arrest the rate of of increase in the uh private non-bank sector which has grown 22 percentage points since the end of 20 2021 to 58% of the marketable treasury debt market. That's a very unstable dise equilibrium. And I I think Kevin Walsh is aware of that. I I mean any central banker would be aware of that. Certainly Scott Best is aware of this. And so ultimately, we just think that they're going to find ways to pull the commercial bank lever uh in order to kind of um ease some pressure on the Fed and commercial banks broadly in terms of capitalizing the Treasury market and ultimately um at their man for reserves. >> Okay. So, I'm excited to ask you this question because you said that Scott Bessant, Treasury Secretary Scott Vesson, was a former client of yours. So, you you perhaps may know the man a little bit more than rest of us who just read the headlines and see his interviews. >> Yeah. you know, he so he led the the search for uh Pal's replacement. Um clearly must have been a very influential voice with the president in terms of trying to, you know, in terms of landing on Worsh as the nominee. Um, and in that search process, I I was surprised, pleasantly to hear Treasury Secretary Bessant talk about how he thinks the Fed has been guilty of mission creep and, you know, basically expanded its mandates too much and, you know, created some price defformations in the marketplace and and potential uh wealth inequality as a as a result of all that. and and you know talked about hey in the future we're looking to see if we can't actually kind of you know shrink the mandate of the Fed and maybe more like something like it it was initially created for um how serious is he around that and do you think with the selection of wars he's deliberately picking somebody to partner with him on doing exactly that? Yeah, they're very serious about this because ultimately Worsh is a monitorist who understands the role of money in in monetary setting monetary policy, right? I think that's to me that's the the number one thing. I mean there's a there's a core belief amongst the worsh kind of warscent community in financial markets and you know I have the great privilege of meeting with a lot of institutional investors across the global buy side. you know there's a you know there's you know there's different cabals you know there's you know there's the you know the high quality compounders cabal then there's the you know kind of the Keynesian econ economist cabal then there's the you know the rightwing you know kind of Hoover Institute economist Chicago booth cabal you know there's all these different cabals with across the global buy side and in the Kevin Walsh secretary bessent you know kind of Larry Cutlo if you will cabal they believe they're monitors they believe that the Federal Reserve was contributo to this you know explosive growth in in prices that we've seen in the pandemic uh in this pandemic um you know business cycle. Uh you go back to 2020 and 2021 and the Fed doesn't talk anything about this. Nobody at the Fed acknowledges this. They'll blame Russia's invasion of Ukraine which they still do to this day. They'll blame the pandemic supply chain disruptions which they still do to this day. But they won't blame the fact that the federal budget deficit uh the you know grew by you know 5.9 or federal debt grew by 5.9. We accumulated $5.9 trillion or $6 trillion in deficits in two years and the Fed monetized almost 60% of it. And so Wors has explicitly called this out in a series of of statements in terms of the Fed's ridiculously easy monetary policy which in you know if you look at it on a relative to the Taylor rule was even easier than what we saw uh from Arthur Burns back in the 70s and then that's not even including the balance sheet obviously this is is easier than what we saw with author Burns back in the 70s. you know, the the Kevin Worsh understands this and so they ultimately are are attempting, if you will, to put a cap put put guard rails around what the Fed can do in terms of creating an inflationary dynamic in the economy. Um, you know, if you go back to the 70 the 60s and 70s, you know, money supply was a perfect leading indicator for all the spikes that we saw uh in inflation. And so ultimately we think Kevin Walsh and and Secretary Secretary Scott Besson ultimately want the the the the money supply growth to not come from such aggressive broad largecale asset purchase programs that are you know can be easily politically influenced and manipulated. I just think they want this to be the economy to go back to how it used to operate prior to the the GFC which is banks were the largest determinant for the growth rate of money uh and the business cycle. And so ultimately and and as a function of that, you know, we generally have uh pretty um stable outcomes in the economy, you know, barring the GFC, but I don't know that they could get there overnight. But in my opinion, I think that's where that's where we're going. And and you so as an investor, you had to put that hat on and say, okay, what was the world like prior to the GFC? What were the factors that led in the equity and credit markets? You know, where were the flows? How did the currencies uh behave? How did fixed income behave? Uh in our opinion, we think that's uh that's where the world's going. >> Okay. Um so you you mentioned earlier that um you're expecting substantially more higher economic growth this year than than the street seems to be expecting. Um we talked about the reasons why. Uh let me let me ask you this. So uh we just had the recent Supreme Court ruling basically striking down the tariffs or declaring the tariffs unconstitutional that the administration has used so far to date. uh the administration is saying, "Hey, it's not an issue. We've got other ways in which we can apply tariffs on countries." Um do you have any concerns about this, you know, curveball to the administration's uh intended policies or do you think the administration's correct that they've got just other venues to do exactly what they want to do here? >> I don't think it matters. >> I'll say the same thing I said in April of last year. We're telling clients to get long before everyone has to capidulate to the upside, which when I was on your show in June of last year, that's when we first saw the big first wave of upside capitulation that we're >> it doesn't matter. Tariffs only impact a very small percentage of the economy and and that percentage of the economy is not necessarily represented in financial markets. You know, this is 10% of nominal GDP and 14% of employment. It's goods import are only 11% of nominal GDP. So if you're talking about the effective average tariff rate is somewhere around 10% and goods imports are somewhere around 11%. This is like 1% of GDP. You know what I mean? Like we're talking about like 1% of GDP in terms of the tariff tariff regime. It's really not that much. I'm we're focused on the other 99% of GDP. The 99% of GDP particularly the the productivity dynamic. um you know we go back to the productivity which I think is going to have a much bigger imp influence over financial markets uh than than the tariff regime. We index we index this this this this back test on productivity relative to each of these troughs in the productivity cycle. There have been nine kind of productivity cycles since we have the data going back to uh the 1940s and the current productivity cycle upturn is outpacing that of the internet technology diffusion productivity cycle upturn which is one of the best of all time. >> Wow. Okay, zero here represents you know the trough in this chart here the year of your rate of change in productivity growth and 40 would be 40 quarters from that and minus 40 would be minus 40 so 10 years prior and 10 years post the internet technology productivity cycle again was one of the best of all time rivaling the 1950s and 1960s productivity cycles up terms which were I mean we'll never do that again we're electrifying the economy we're you know internal combustion engines were you know going everywhere we had investment in human capital coming off the coming back from the war and the GI Bill. There were so many reasons why productivity exploded higher back then, but we're already outpacing the internet technology productivity cycle uh currently uh the current productivity cycle which began in uh Q2 of 2022. We're outpacing the internet technology which again is one of the best productivity cycles upturn. So to me this is the 99% of the economy that no one's talking about whereas the 1% of the economy in terms of the cumulative impact of the tariff regime is what the media wants us to focus on. you know, they want to they want to sell us, you know, things that tickle our amydala and get us to click and subscribe and get us to buy and interact with the ads that they put on their platforms. But the reality is that stuff doesn't matter. What matters is growth, inflation, monetary policy, fiscal policy, liquidity, and positioning. Those are the six key cycles that influence the momentum and dispersion within and across asset markets. And if you notice I didn't say tariffs, you know, notice I didn't say geopolitics, you know, notice the all the stuff that the media tries to get us to interact with. Yeah, it's great for headline, but it doesn't matter in terms of the trending momentum and dispersion within and across asset markets. This stuff is what matters here in our macro model. >> All right. Well, folks, when I talked earlier about endorsing 42 Macro as the DIY solutions provider um for thoughtful money viewers, you know, hopefully by now you've just been overconvinced of the level of rigor and analysis and detail and intelligence that goes into all this. Um so, uh Darius, uh couple things. First off, I want to give you kudos again. um you were a lonely bull uh back at the end of 2022 going into 2023. So that was the period where everybody was 100% convinced we were going into a recession. Uh you were one of the very few voices saying I don't think it's going to happen. In fact, I think things are going to be pretty good for investors from here. Um you were proven correct. You held that for a couple years uh being proven correct all along the way. at the beginning uh early in 2025, you came on this program and said, "Hey, Adam, I'm actually now pretty bearish." And of course, then we had the liberation day, you know, kick to the shins for the markets. And then to your point, relatively quickly after that, you said, "Hey, I actually think the market's way overreacting here. I think the tariffs are not going to be that big of a deal. And I think for a lot of structural reasons, a lot of things are on sale right now. Let's get in the pool." You proved again to be very right on that. Um I get the sense now I don't want to put words in your mouth so correct me if this is wrong. I get the sense that you are a raging bull uh economically looking out here that doesn't necessarily mean that the markets are also going to perform as well. Now, you talked about how you think a lot of the market outperformance is going to be driven by AI and it's going to be in the international stocks and the cyclicals and the small caps, but valuations are getting pretty rich here in certain parts of the market as we talked about. Does your enthusiasm for the economy this year translate into enthusiasm for the general market or is it largely going to be lo uh is it largely going to be concentrated in the areas that you mentioned there uh international cyclical and small caps? Yeah, it's an excellent question and thank you for that uh you know kind um recap of of where we've been over the past few years. >> It's not kind, it's just what happened. It's just >> we've we've you know, like I said, I I I spent the first 12 years of my career making rich people richer. Uh I'm really blessed to to to have spent the last, you know, half decade making everyone uh richer, including the our very wealthy by side clients. No, but again, we we've had a we've had a really blessed run here. You know, we were we were appropriately bearish heading into 2022. We were appropriately bullish at the beginning of 2023. We were probably bearish at the beginning of 2025. And then we pivoted back to being bullish back in April of last year. Um, you know, so we we've been we've been, you know, we've been on the right side of market risk for a very long period of time now. And it helped our customers maximize a tremendous amount of upside capture in those bull periods and minimize a tremendous amount of downside capture in those bare periods. And so again, really blessed by that. But again, it's not it's there's no luck involved. know there's no there's you know we're very very extremely systematic investors if that if you if it's um if it's not obvious at this point it'll be obvious by the end of this interview when we unpack our KISS model portfolio but you know from what I can say in terms of answering your question we continue to believe that mag seven type names you know again the the the concentrated exposure that investors had to US tech which they should have had if they wanted to outperform for I don't know the last 10 to 15 years that concentrated exposure that a lot of folks have will in our view will continue to be a source of funds to capitalize other factors with namely international small caps cyclicals. If you can remember international small cap cyclicals or you know some order uh we think that's just that's the most appropriate uh trade. We think that the upside in those factors uh in terms of you know responding to a lot of these positive economic developments is likely to be greater than it is um in in terms of like you know the cues or something like that. So uh that's our general belief uh here uh and and in terms of the just the broad market risk. So you know we refresh our macro weather model for our the members of our global investor community on a daily basis six days a week uh here at 42 macro and and as you can see by the composite signals here in the middle of the page. You know the the risk-taking environment is still good. You know there's a high probability sustaining a risk on market regime over a short to medium-term time horizon which is one to three months in our risk management nomenclature. when we look out further than you know three months you know that's when we layer on our fundamental research views which are broadly bullish and so if you think about the growth cycle you know the the indicators that we uh uh track across the growth cycle are currently suggesting that we you know we have a meaningful tailwind for risk assets right now uh monetary policy suggests we have a modest tailwind for risk assets right now and the liquidity cycle suggests it's a modest tailwind right now so that's all positive where we're getting some sort of pushpull and part of the reason why we've seen more you know violent choppy, you know, kind of aggressive rotation type flows, you know, particularly in the factors that are being rotated out of is because we do also have some headwinds currently. You know, the inflation cycle is currently a modest headwind on net. Um the fiscal policy cycle is currently a modest headwind, although it's likely to transition to a modest tail meaningful tailwind in the coming months. We think the inflation cycle will become a modest tailwind in the coming months as well. But ultimately the number one thing that continues to be an issue for financial markets and particularly US equities, US credit in particular is the fact that we have such crowded bills positioning. Um it's not as crowded as it was back in November when we first called it out and said, "Hey, markets are going to start to be very choppy, especially if the Fed does not fix this repo market um issue that we have been highlighting, which they ultimately pivoted to reserve management purchases on December 10th to address. Um and so you know we continue to see that that choppy nature and that rotational nature of the markets that churn you know kind of violent churn that we've seen that's likely to continue u because ultimately we don't have this massively meaningful tailwind in liquidity that's kind of rising tide lifts all boats like we used to and that may be permanent question if Kevin Walsh represents a meaningful downshift in the Fed's footprint in the economy and financial markets and of course they get the uh the bank deregulation wrong. I'm not expecting them to get the bank deregulation wrong. I think it's all likely to end well from the perspective of our paradigm C thing theme thing. But that doesn't necessarily mean markets at the price of end a linear straight line. It just means that you know by the end of this year investors will likely be satisfied with their returns in equities and credit and investors who have international equities, small cap equities and cyclical equities will be much more happy with their returns than the investors who kind of stay put in, you know, the cues. >> Okay. All right. Well, great succinct uh and uh very actionable. Um All right. So, we're making our way here to your KISS models, outputs. Um, is there anything on the macro or fundamental side that's really burning brightly on your radar that I just haven't thought to ask you about yet that's worth talking about? >> Yeah, let me just click through. Uh, we yeah, we we have not talked about AI's impact on jobs. To me, that's the number one thing that we have to figure out, not just as investors, but as as a society. >> What do we got to do about this? And again, I had so much push back from institutional investors for the past six months on this on this theme, but I don't know that you can credibly credibly push back anymore. I mean, they're literally shooting they're taking software stocks out like Microsoft and Salesforce and they're selling them like they're, you know, they're going bankrupt. >> If they're going to sell those companies because of AI disrupting them, don't you think that the employees that work at those companies are going to get disrupted? >> Yeah. And and I mean the day we're talking here, Darius, you probably saw the headline about Block, >> which voluntarily just fired half their company because they're like, "We we just don't need them. The AI is helping us be that much more productive." >> And the stock went up 20ome%. What does that tell you? Nvidia beats beats numbers, blows out numbers, raises guidance, stocks down 6%. Block cuts half of his workforce, stock up 20%. can't I I can't be more clear about what that is signaling from from the perspective of the long-term risk to the labor market. Now, again, this is not like we're going to go from 4.3% unemployment to 5.3% unemployment in six months. That's not what's going to happen. But in our view, we think AI is going to be a uh a catalyst for a durable continuation of this low hire, lowfire dynamic in the labor market. And I'll show you a few charts on why we believe that. So, we'll start here on jobless recovery. This is the top panel shows private sector job openings. We the most recent Jolts report we got is from December. And in December, private sector job openings collapsed collapsed 62% on a three-month annualized basis. >> Wow. >> Down 62% on a three-month annualized basis. Private sector job openings. If you look at private sector employment um true private sector employment so something like true private services which strips out uh government and government adjacent sectors like uh the federal, state, local governments, healthcare, education and social services. So just the private sector economy that is not you know where the government isn't the the the main employer or the main buyer of the service. We've basically had no growth for over two years now in true private services payrolls. are currently growing at 0.1% on a three-month annualized basis, 0% on a six-month annualized basis, and minus 0.1% on a year-over-year basis. This is almost three years now where there's been no employment growth in true private services payrolls. I'll show you another chart on this. If you go and you look at uh the total amount of employment that has come from you know this this this government and government adjacent sectors prior to co it was about 31% of total employment growth came from government adjacent sectors which again federal state local governments healthcare education social services the the the last two years of the Biden administration it was 84%. The first year of the Trump administration it's 144%. That means 14 out of every 10 jobs that are being created right now are coming from the government and government adjacent sectors. There's no dynamism in the private sector uh uh labor market economy. And so ultimately that lack of dynamism, you can continue to see it in this lowire uh lowfire uh rate where the private sector hires rate is well below trend at 3.7%. Private sector quits rate is well below trend at 2.2% and then the private sector layoffs and discharges rate is well well below trend at 1.2%. Um, you know, if you look at the uh unemployment rate um in terms of um the unemployment rate, you know, we're at 4.3%. If you want to add back the folks who left the labor market uh in terms of the the the the folks who left the labor market in terms of the decline in the employment to uh uh population ratio relative to the all-time high, you know, we could already be at 5% in terms of unemployment uh uh in terms of unemployment rate right now. Uh and this is, you know, prior to AI really making a meaningful dent. I think by this time next year, it'll be pretty clear that companies don't need to hire people at the rate that they used to if if they're in the white collar industries, which is roughly about 50% of total employment. >> Wow. All right. So, you know, big picture, um, this just adds tailwinds to the productivity gains of companies going forward. Um, so good for corporate profit margins, good for presumably for shareholders in those companies, but rough for uh, you know, rough for employees, right? >> Rough for society. >> Yeah. And Yeah. I mean, at some point this potentially gets bad enough that I mean, society has a real undermployment problem here, right? >> Yeah. Yeah. I mean, look, I I think that's a couple trades away from now. I think the trade now is productivity equals faster profits and faster growth and ultimately faster capital, you know, appreciation of capital. That that to me is the current trade. The next trade is what do we do? What do we what are we going to do with all the people that we used to employ? U I have thoughts on that, but that's probably not for this discussion. We we'll have a discussion about that in the future when it's time. Uh but I mean just kind of you know kind of landing the plate on all this the long-term unemployed as a percent total was at 25% now and it's been gradually rising for years now basically troughed when when Chad GPT came out unfortunately uh uh and that you know that that that 25% as a percent of the total unemployed is compared to a long run mean of 16.5%. this number in our view and according to our analysis and according to the data that we can currently observe and if you want to look at the model we built you know if you look at um employment growth you know there's this kind of narrative out there that okay the president closed the border and he's enforcing immigration policy and so that's now causing a structural down cyclical downturn in the um the what they call it the break even rate of total employment or employment growth you've heard that argument u posited by uh several economists on Wall Street completely disagree I That's just it's it's factually incorrect. The civilian labor force is currently growing at 1.8% on a year-over-year rate of change basis. That's a 70th percentile value with data going all the way back to 1948. And so historically when the civilian labor force has been has grown at this rate of change, you know, 1.8%. The median rate of change of nonprivate non-farm payrolls growth is 2.3%. Private non-farm payrolls growth is growing at 0.3%. >> Wow. So there's already a dramatic underperformance in private non-farm payrolls growth relative to the 70th percentile growth rate of the civilian labor force. And so I in our view this this AI's impact on the labor market is already happening when you look at labor demand from the perspective of job openings, labor demand from the perspective of actual employment and then ultimately labor demand from the perspective of can people who've been who've been let go actually find a job in terms of long-term unemployed as percent of total and and the answer unfortunately for society is is is not good. So Darius, I know that a lot of viewers on this channel have a lot of concerns about this future for AI. You know, many for themselves, but but many for their children. Um, and I would love to do a deep dive on this topic with you at some point in the future, whenever works in your schedule, whenever you think appropriate. Um, because I just think there's such a hunger for just trying to figure this out and to to reduce our potential future vulnerability to this. Um, you know, I look at all this and I I have lots of worries about where society may go, but just in a very simplistic way, I think, okay, look, you know, companies are going to be more profitable. Their stock prices are probably going to do great, right? >> Um, so everybody who's on the lower end of the K-shaped economy, they don't really have assets, right? So asset owners are going to do great in this future. >> Those that don't have assets, well, all they really got is their job. If their job goes away, what do these folks have? So that's that's kind of the core concern I have. It seems like you share that as well. >> 100%. I mean that's in our view that's exactly where we're going. We've already gone there without AI like like we there's been an allout assault on labor share of national income which is the blue line here in this chart for decades partially as a function of globalization but the number one reason we think there's been an all-out assault is because it back in the 80s with you know Reagan and Thatcher they did a lot of great things in terms of um you know the the neoliberalism you know uh era that they kicked off did a lot of great things in terms of boosting aggregate output GDP corporate profits the the the the increase the wealth of the the the economy in aggregate in terms of the stock market and whatnot, but it did create a lot of issues from a distributional standpoint. And one of the biggest issues it created from a distributional standpoint is the relationship between labor and capital. >> That is that's the ultimate K in the K-shaped economy. Um, you know, you want to just draw a horizontal line here. We've been going straight up and to the right in terms of corporate profits as a percent of gross domestic income. We're going straight down and to the right in terms of labor share of national income. And so ultimately, the true promise of AI is not just efficiency gains. It's how can I replace my biggest cost of any most companies biggest cost is labor and so you know the traumas of AI from the perspective of the capital holder is that the blue line which has been trending lower for decades as a function of the assault this prioritization of profits over people. That's what neoliberalism really meant to for society was hey you know we'll fix inflation but guess what we're going to do it in a way that prioritizes profits over people. So now we're at the logical end of that uh you know extreme and and now we're starting to have some pretty extreme outcomes. Um you know we could have the the rate of change the the slope of the blue line accelerate or decelerate or go down you know go down faster and the slope of the red line go up faster. That's in our view that this is the current trade. The the the the change in these slopes you know to going down faster in blue line terms and up faster in red line terms is is that's the current trade. And I don't know when that trade ends, but it's probably got some legs at least, you know, 12 to 18 months in terms of pricing it in financial markets. Uh, and the next trade is, okay, when we get to a low enough level here, what's the political response? You know, what's the geopolitical response? Because I'll tell you right now, >> what's the fourth turning outcome here? >> 100%. I was just about to go there. I'll tell you right now, you study the the greats like Neil How, my former colleague and a friend. Uh, you study the greats like Ray Dallio. you study the the brilliant authors like Peter Turchin, they'll tell you right now, one of the preconditions for war is in inequality. And I'm telling you, if we're right on this this jobless recovery theme, even a little bit more than we currently have been, we're going to wind up in some sort of um conflict most likely as a function of this. Uh I hope not, but again, that's that that would be hoping not would be fighting centuries of data and we're not that's not what I do. I get paid to do. >> Yeah. And you know the the proponents of of AI when asked this will say well you know if it gets there there'll be UBI and that'll solve everything. I've got strong skepticism around that and that's probably you know a hairball to talk more about >> UBI comes after the problem though the people even if they get UBI it's they're going to get we're only going to get UBI after a bunch of the unemployment rate goes up a lot. UBI is not going to come before the unemployment rate goes up a lot. You know there will be a tremendous amount of hardship uh in you know these economies particularly economies that adopt AI. uh the fastest with the least amount of guardrails. There's going to be a tremendous amount of hardship for a lot of families. So, you know, you know, part of my job as CEO of 42 macro obviously is to guide our the global investor communities uh and their portfolios to to to navigate this, you know, all these dynamics safely uh and help them maximize upside capture bull markets and minimize downside capture bare markets. But again, as someone who escaped the very bottom of this cave, I have a duty. I have an obligation. I have an obligation as a Christian to, you know, to warn people about what could potentially happen in the future. Again, I'm not a doomsdayer. I I'm obviously bullish. You know, this is not a doomsday quote, but I I I think we have an obligation to try to make the world a better place. Certainly, I believe I do as a Christian. And, you know, we're going to use our research to try to educate the general public, not just the investing public, but the politicians and and and the other key decision makers in society on how to we potentially avoid some of these really, you know, left tailed type outcomes. Well, that's one of the many reasons why I'm such a huge fan of you, Darius. But, you know, as I see making it, you know, bringing it down to kind of Fal Money viewers watching your material here and the the partnership that we just announced between our our businesses here is, you know, I think a big important part of what you're doing is telling people, hey, look, there is opportunity in this trajectory that's out here. It's all the things you're bullish about and you're trying to get as many people to, you know, be able to take care of themselves and profit from this so that as sadly the bottom half of the K may continue to struggle from here, they'll be in a position to actually help others. >> Amen. Amen. was one of my favorite things I've ever heard said in the history of mankind is uh Jay-Z, arguably our most successful American, he's probably the most successful person in this whole American experiment thing that we've ever seen. The only person in the history of mankind that was a crack baby that became a billionaire. Um so in terms of being the American dream, this man said, "I can't help the poor if I'm one of them. So I got rich and gave back to me. That's a win-win." H >> that's that's something I live my life by. >> All right. Well, look, we we'll end the AI part there, the AI jobs part there, but again, I would love to have a deep dive on this at some point in the future with you if you are so inclined and and available. Let's get to the KISS part before we wrap things up. >> Oh, yeah. You know, we obviously do a tremendous amount of fundamental research. You know, this is 170 slide deck. We publish one of these uh presentations every month with the webcast to our global investor community and and obviously they they love it. But I'll tell you right now, the best investors in the world rarely make changes in their portfolio in response to fundamental information. The best investors in the world, the folks with the best performance across the global buy side, the folks that charge the most money for their investment services across the global buy side, the funds that charge three and 30 across the global buy side, most of the portfolio repositioning decisions that they make are functions of institutional risk management overlays. And so as someone who's helped design and implement those risk management overlays for for the global buy side for many years, it became very clear to me that there's a big opportunity for us to build something that, you know, narrows that that performance asymmetry between these funds uh in terms of their ability to, you know, reduce volatility drag and and maximize upside capture and ultimately grow their portfolios, their wealth faster, their clients wealth faster than, you know, the general investing public. And that's only done by eliminating volatility drag. And so we built this KISS system to essentially, you know, import two of what we consider to be the hallmarks of institutional grade risk management to the general investing public. Um the funds that charge three and 30 for their services across the global buy side, they employ a combination of volatility targeting and dynamic position sizing to manage risk uh for their investors. And we do this uh very simply. We built this very simple system that a lot that helps you know is very simple to follow in terms of um in terms of participating in uh you know we use our risk management processes namely our market regime casting process which incorporates the ball targeting and then we use our volatility adjustable momentum center which dynamic position sizing we just apply that instead of applying it across dozens or hundreds of PMs across you know dozens of asset classes we just simplify it and so you know KISS is just a very simple 60 3010 trend following strategy that is designed to, you know, demonstrabably outperform what everybody's favorite quote unquote retirement solution is, which is 60/40. The 60% stocks offensively expose our portfolio to productivity growth. We use VT, global equities for that. So, total international equity market, including the US. Uh, we use gold, 30% gold, which defensively protects our portfolio from financial oppression. Uh, we talked about this in recent episodes, Adam, but go back to October of 2024. uh we we we developed our bullish bias on gold in September of 2023 when we first outlined our uh investing during a foring regime analysis and ultimately first and notice the geopolitically driven supply demand imbalance in the treasury securities market. Um it took us until October of 2024 to finally have enough conviction and confidence to make the change in KISS to swap out core fixed on the 30% target allocation to core fixed income uh with gold. Uh obviously that was a phenomenal uh decision that we made but I mean it took a lot of you know it took almost a year of soularching. I mean don't forget we have some of the world's largest fixed income portfolio managers as clients. You know I can't go to a meeting with them and say hey we we we don't have any allocation of fixed income. You know that took a while but again it was the right call and you know and after many sleepless nights we finally made the decision to do that in October 2024 and haven't looked back. And then finally, the 10% allocation target allocation of Bitcoin defensively protects our portfolio from monetary debasement. And so, you know, if you're if you're imp implementing KISS, you know, what this essentially looks like is just a a pie chart asset allocation. You're it's it's it's very simple to implement. You only have to, you know, implement the pie chart at any given time. You know, we're currently at 10% cash because there's no position in Bitcoin. Bitcoin we've been out of since November 7. Our riskmanagement overlays, the top down and bottom risk management overlays that incorporate the bull targeting and the net position sizing got us out of Bitcoin on on November 7th. I want to say Bitcoin is probably down 30 to 35%. >> Yeah. Wow. Okay. That's good timing. >> Yeah. Yeah. Absolutely. And again, it's not a that's not a fundamental research call. Those are the risk management overlays telling us that there's >> left tail risk developing in this asset class that we need to reduce our exposure. That's what ball targeting and D position sizing do. And so we're still at 100% of our maximum exposure in equities and VT global equities total international equity market. we're still at 100% of our maximum exposure of 30% uh in gold. And so ultimately as someone following this KISS system, you know, again, just implementing this simple pie chart across uh you know, three, you know, three core asset asset classes, stocks, uh gold, Bitcoin, and then there's cash whenever there's it's not maxed out. If you're just implementing this very simple system with, you know, three different ETFs or you can you can swap out ETFs. We allow folks to do that if they want to customize it. But, you know, this standard version of KISS is incredibly effective, Adam. incredibly effective. I mean, so effective that we have thousands of investors around the world consistently telling us that they're having the best performance they've ever had. They've reduced the amount of time that they spend going down research rabbit holes. And as a function of having the best performance and reducing the amount of time, their stress levels are way lower. You know, they're interacting with their family and their community better. They're supporting their family and communities better. You know, it's such a positive thing that we built here in terms of this KISS model portfolio system. And so if I can end on this um you know a couple slide a couple uh highlights uh from this uh you know rolling out of sample back test uh that we produce you know just a few things to highlight on in terms of the draw down. So KISS the max draw down for KISS is minus 12% on a rolling out of sample basis. That compares very favorably to the max draw down of 23% for for um the 60/40 portfolio and the max draw down of 28% for a uh naked long fully invested portfolio of 60% global equities VT 30% gold and 10% Bitcoin. So if you were just always long those assets in that those ratios without our riskmanagement overlays that incorporate the ball targeting and position sizing, you would have the max draw down of 28%. As opposed to a max draw down of only 12% if you actually you know if you use our overlays and so uh the four most important word uh five most important numbers on on this slide I would say are the numbers that I'm circling now. And so if you wanted to compare KISS to 60/40 portfolio, it has an upside capture ratio relative to 6040 6040 rather of 300% and a downside capture ratio of of of 54%. So you're essentially getting three times the upside and only half the downside relative to 6040. If you wanted to compare KISS to a naked loan portfolio of 603010 stocks, gold, Bitcoin without our risk management overlays, you would have 97% of the upside but only 45% of the downside. So, what you're doing here is you're creating a positively skewed return distribution in your portfolio, which allows you to compound returns from a higher net asset value across multiple market cycles. Notice I said from a higher net asset value. >> Yeah, exponential growth works better when you compound from a higher net asset value, which is something you can only do with a positively skewed return distribution, which is what KISS creates for our uh customers. And so the final thing I'll say as I mentioned the fifth number that's most important on this page is the calmar ratio which is the compound annual growth rate of the strategy on a rolling out of sample basis divided by the max draw down of the strategy. The calmar ratio for kiss of 1.3 is exceptional it's very difficult for anybody to achieve a calmar ratio of one in institutional finance. And so we've built a system that allows us to have a calmar ratio that's even greater uh than what would be considered exceptional across institutional finance. In that account, my ratio compares extremely favorably to 6040 at 0.3 and a naked loan portfolio of 60310 stocks go Bitcoin at 0.7. So super proud of what we built, even prouder of the incredibly positive impact that we're having uh for thousands of investors around the world and and so and and just really grateful for the opportunity to present today and more importantly, Adam, super proud and really grateful for the opportunity to partner with you, brother. This is going to be a phenomenal journey. >> Thank you. Um well look uh thank you again for everything but but for today for going through again all of your work in in such great detail. Um a couple quick questions there on KISS. Um one is for folks that didn't catch the um the the ETFs that you're using for KISS. If you subscribe to the service, they're they're all right there. Um Daryl will share them right now. But the the equity one is a global equity one. So you you're you're very excited uh now about the prospects for international equities versus domestic equities. You're capturing that in this global ETF. Correct. >> Yes. Correct. And then this is glo total international equities which includes the US as well. >> Right. It's the whole world more or less. Right. >> Yeah. So it's the whole world's equity market. And so one of the things that gets us very excited about the durability of this convergence thing that we started the conversation with today is the fact that if you look at um you know these global equity ETFs VT is the one we selected for KISS has the best combination of geographic exposure uh liquidity and expense ratio of the ETFs that we sampled. a couple other ETFs that we sampled. I think SPGM I believe uh is the global equity from um from State Street from Spiders and then Aqu is the global equity uh ETF from from Black Rockck from the Eyesshares and all three of them all three of them Adam have 60% allocations to US stocks. All three of them >> now that in my opinion I think that almost guarantees that we're going to be right on this long-term convergence theme. Uh and the reason I say that is if you look at the actual market cap of global stocks of US stocks relative to global stocks, we're only 46% US. So investor portfolios have 60% US stocks in them. Whereas US stocks are only 46% of the total, >> right? They're overweight US. >> They're overweight US. Every investor in the world is overweight US at a time where we're likely to experience for the next several years a convergence in productivity, profitability, earnings and valuation in international stocks. And so ultimately as an investor you just have in our opinion you have to diversify. And I'll end on this and I don't want to end with a scary thought but this is a scary thought. Every capex bubble in the history of the modern US economy going back to 1800 has ended in a secular bare market. Now we can debate whether or not we're in an AI capex bubble or not, but if you believe that we are in an AI capex bubble, you have to assume that it's going to end in a secular market for US stocks. And so if that's true, um then obviously you're going to want to have some diversification, if not a lot of diversification, uh in international stocks. So we think VT positions KISS and our uh the members of our global investor community really favorably for for that outcome. One to capture the upside of the convergence trade but also to minimize downside capture when this thing finally does roll over if we're right on this AI capex bubble equals subsequent secular bare market. I mean you go back to the panic of 1857 and 1873 after the railroad capex bubbles led to secular bare markets of 54 and 35% draw downs respectively. the uh the the dur consumer durable goods capex bubble in the 1920s you know kickstarted a a secular bare market that featured a max draw down in the S&P terms of minus 86% and then the IT capex bubble from the 90s uh concluded with a secular bare market in US stocks featuring a max draw down of 49% for the S&P and 83% for the NASDAQ I mean it's if we're if we're even half right that AI capex bubble will will end in a in a secular bare market then it you would be you would you just wouldn't be a good fiduciary of your own or someone else's capital to be still overweight US equities in that context. And so ultimately going back to you know this previous chart here we just think that 60 in global in investor in the investor portfolio that 60% overweighting is going to go down and down and down over time. So um I think we're right on this. >> All right. Um so one of the really attractive things about the KISS model is not just the performance which you just watched us through walked us through um as well as the the lower uh shallower corrections versus the other type of approaches. Um but it it it doesn't change all that often. I mean, it does change, but like there's a lot of people who subscribe to, you know, someone else's market newsletter, and they may be making trades every week, a couple times during the week, like you >> a day. >> Pardon me. >> I worked at a place that that was sending out trade updates several times a day. >> Several times a day. Right. So, with with KISS, and of course, it it differs given what's going on in the market, but but kind of ball like how many times did the KISS model change in 2025? probably less than 10. >> So, so on in terms of the like so this rolling out of sample back test begins in January 2018. Uh since January 2018 and it's rolling out a sample back test, the only been average of two trades per month in KISS, but they're they're they're clustered. So whenever we have a market event there, the KISS takes down risk in a series of successive trades and then once we come out of the market, you know, market crash, then KISS will take up risk in a series of successive trades. But then it could stay there and not do anything for several months if not a couple few quarters. You know, it's not like KISS is trading twice every single month. It might trade six times to to take the risk from, you know, 100% allocated to 0% allocated and then might trade, you know, six to 12 times to take it back up to, you know, to to to fully allocated. So, you know, it's it's >> and then it might sit there for months with no trade. No >> quarters. Yeah. Totally 100%. Yeah. Very easy. I mean from you know from the time I think from June from June 2nd to October 30 there were no trades in Kiss from June 2nd to October 30 I think when we started taking down Bitcoin of last year you know so Kiss was just you know fully invested just maximizing upside capture like it's supposed to do from you know June 2nd to to October 30th. Kiss started buying uh S&P and Bitcoin uh stocks and Bitcoin back in November or back in April when we pivoted to Paradigm C. Again, that was coincidence, not not on purpose. You know, when we pivoted to paradigm C, that's a fundamental research call that we made at the time that was subsequently confirmed uh by our um you know, systematic, you know, process uh that said, hey, now you know, this is this is the right time to actually put that on. Um and I and I'll leave you guys with this piece of investing wisdom. you know the best investors in the world do not like like I said earlier they they rarely make changes in their portfolio uh that are you know fundamentally oriented they generally speaking wait for some sort of confirmation from financial markets to you know to to to prove of their fundamental research views uh you know a lot of investors you know the general investing public does the exact opposite they learn about something and they go well the moment I learn this suddenly it's a good idea Now I got to put the position in my portfolio. The norm I figured out that this is a short or a bad idea. I got to short the thing. That's not how the world works. That's certainly not how institutional investors maximize upside capture in bull markets and minimize downside capture bare markets for their uh customers. They are much more um tied to you know the decision. They systematize the decisions that they make in their portfolios with the use of you know institutional grade risk management overlays the kind that we feature here in this case model portfolio that produce such stellar results both in a back tested basis rolling out a sample back tested basis but this thing has been live since January 2023. Um I'll invite everyone you know who's still listening us uh talk right now to go check out the 42 macro testimonials page 42mmro.comestimonials. There's hundreds of testimonials from investors just like the folks who are listening to me talk right now saying a few things. Kiss has produced the best returns they've ever had in their life. They're feeling confident about their retirement for the first time they've ever been as investors. Uh they have way more time that they're spending way way more time they're spending with their family because they're not going down, you know, rabbit holes on this fundamental theme or that fundamental theme. And ultimately, as a function of those three things, their stress levels and their health, their stress levels are lower and their health is better. I mean, hundreds of testimonials on that page, uh, from investors all around the world, 80 plus countries around the world. So, I know that we built something really special here, and I'm really grateful to partner with you on this journey, Adam. >> No, thank you. So, I just want to make one thing really clear here. Actually, a couple things real clear as we wrap up. Um, you you use the term systematic, and I just want to let folks know if they haven't watched our previous videos here, that KISS does what your model tells it to do. It it doesn't do what Darius Dale might think when he wakes up in the morning. Right. So this is this is very much a processdriven model here. Correct. >> 100%. Absolutely. >> Yeah. So you know of course the one of the benefits of working with a solution like this is it is systematic. It bleeds all the emotion out of it. You are leveraging the discipline that Darius and the 42 macro team have and have put together to build this model here. Um I've talked many many times in the past with other experts Darius about how you know talk about behavioral e economics and oftentimes it's our we are our worst enemy when it comes to our investing success going forward uh because we're just human mammals and we make a lot of emotional uh driven decisions. Um, but the thing I want to underscore is, you know, if if you do subscribe to the 42 macro service and you you deploy it, you know, as an individual investor, you're not signing up for this, oh my god, I've got to read this thing in full every day because I've got to make trades every day or several times a day or whatever. It's it's a very manageable process for you to follow because it doesn't have that many changes. >> Yeah. Very Yeah, very infrequently. Again, the only time there the changes cluster when the volatility clusters um which is another core finding that that powers the volatility just the momentum signal element which powers both the market regime casting process which we feature in the top down respion overlay as well as the um the bottom up risk management overlay the position size that we feature in the bottom up management overlay. You know the the trades clust so if we're heading into a market crash then kiss in a successive series of trades will take down stocks will take down uh Bitcoin maybe even keep gold where it is. It's certainly typical where it was last year. Uh and then when you're coming out of the market crash, crystals in a successive series of trades take up, you know, the risk of stocks, take up the risk of Bitcoin. And so that's where the trades get clustered. And by and by and large, there's hardly any any pivots. >> I mean, yeah. >> So folks, you know, rubber meets the road here. If this is something that you're interested in learning more about, go to thoughtfulmoney.comdiy. It's a very short form you fill out there. It'll literally take I think it asks for your email address, your first name, last name. You get connected with the 42 macro team and they will provide any and all information that you might need to make your decision. Uh and obviously Darius, super duper excited about this. Uh real honor, privilege u nothing but optimism about what what lies ahead here. Um, you are also going to be a featured speaker as you have been uh in past ones at the upcoming thoughtful money spring conference which by the time this video releases I think will be just 3 weeks away. Um, and so um, one I want to thank you again for uh, coming and participating in that. There's, you know, a couple topics we didn't get a chance to talk about here. There's also the potential that there might be a change in the uh the KISS model between now and then and you know folks will to find out tune in and watch Darius at the conference itself. Um but can't thank you enough and Darius if you don't mind I'm just going to mention some of the co-speakers there with you because I think um we have just a ferociously uh amazing faculty this year. Um, we got Lacy H, who kicks it off every year with a keynote, but he's coming back to to do work his magic there, give his graduate level uh chart presentations. We're going to have first timers Ed Dow, uh, Michael Oliver, and journalist Matt Taibbe. We're going to have Judy Shelton. She'll be interviewed by Danielle D. Martino Booth. We're going to have um, Michael How, the liquidity expert. We're going to have Stephanie Pomboy. We're going to have uh, Grant Williams. We're going to have Luke Groman. We're going to have Brent Johnson. Um, we're going to have uh Rick Rule, we're going to have um Melody Wright, we're going to have Andy Sheckchman, we're going to have David Haye. Uh I feel like there's another combo that I'm leaving out there. Um obviously we got the amazing Darius Dale who's going to be there, but really just kind of a murderer's row or you know, Chicago's Bull Bulls lineup here, whatever amazing lineup you can think of in your mind. Um, and I think the timeliness is going to be really uh really important as you've talked about, Darius. Uh, you know, there's there's um I think a lot of octane ahead uh for some of these trends for the people that position themselves uh in them early enough. So again, folks, if you're interested in this, uh, come to thoughtfulmoney.com/conference to buy your ticket. And actually, like I said, it's only 3 weeks away, but there's, I think now, less than a week to get in at the earliest low uh uh, sorry, the lowest early bird price discount that we're offering. And I want to make sure everybody possible gets that lowest price. So, go sign up now and and get it while you still can. And a reminder, if you are a premium subscriber to our Substack, I've emailed you a code that you can use to get an additional $50 off of that that low early bird price. And just as a reminder, the um conference itself is on Saturday, March 21st. And don't worry if you can't watch live. Everybody who buys a ticket will get sent replay videos of the entire event within just a few hours of its conclusion. So, with all that said, Darius, I can't thank you enough, my friend. Again, so excited about this partnership. Um, any parting bits of of counsel or last words to the audience before you come back on in a couple weeks for the conference? >> Yeah. One, I'm excited for this conference. I mean, wow, what a lineup. >> Oh, well, thanks. Well, look, dude, you're you're at the top of that pyramid. >> No, look, I don't know about the top of the pyramid, but I'm grateful to contribute. Uh, I will say this, if you're an investor who DIY, you like to pick factors, you know, because obviously KISS is is designed to be boring. You know, we're the whole purpose of KISS is to maximize upside capture in bull markets and minimize downside capture in bare markets. If you do that over and over for enough market cycles, you're guaranteed to retire on time and comfortably, which is the core feature of what we built here at 42 Micro. If you're a DIY investor that does like a little bit more action, that wants to, you know, go across factors, sectors, you know, pockets of fixed income, pockets of uh global equities or, you know, crypto commodities, you know, we actually make, you know, we run our Dr. MO system which is basically KISS but for 70 different factors across uh US equities uh US equity factors sectors global equities fixed income sectors and macro exposures to essentially get you to the right asset allocation across each of these individual factors and the reason I bring this up is because going back to your conference Adam you have so many really thoughtful investors in that conference that I it almost behoo like it's gotten it's getting to the point where it's like milking or something you can't not participate as an investor And I'm and I'm serious because the people on if you're if you're taking factor risk in global financial markets which means you are now in the alpha game not the beta game which institutional investors you know must be in. Retail investors have a a huge competitive advantage in being able to you know capture beta and actually get rewarded for beta in financial markets. Us institutional investors we cannot. If you're in the the alpha game, once you decide you're in the alpha game by deciding to take factor risk across all these different factors, across these different asset classes, then you have to recognize that alpha is a zero- sum game. Beta, a rising tide, can lift all boats. Alpha is a zero- sum game. So, it behooves you to be as wise or wiser than the people on the other side of your trades, the machines on the other side of your trades. So, going back to your conference, Adam, I just don't know that investors at this point can afford to miss it because that's too much information. That's too much insight. >> Well, you're so kind on that. Um I and I'm so glad that you you mentioned that. So, folks, you know, KISS is sort of where the 42 macro uh service starts and then there's, you know, additional ways to get additional insights, more complex ways to trade if that's what you want to do as a individual investor and Darius did a great job of just giving you just a just the the tiniest of peaks into that. But of course, all that information is available over at thoughtfulmoney.com/diy. So, um, definitely go there. So, just in in saying goodbye here, Darius, I I got to just quickly note you are looking very spelt, my friend. And before we before we turned on the camera here, um, you were sharing me a little bit of your journey. Um, and look, I I I thought you were one of the most handsome guys that I interviewed, period. But, uh, you've dropped how how much have you dropped in the past, say, six months? I uh I think I when I started rucking which was probably was that a year ago or 18 months ago. >> Okay. Yeah. From whenever you put the pack on >> I was probably 295. You know I played left tackle at Yale. So I'm a you know former offensive lineman. I was probably 295. I'm probably about 265 now. So I probably lost 30 pounds just ringing. And you were the reason I started rucking. You you you sharing your fitness journey and all the benefits of rucking for you. I I started trying it out and and you know, 30 pounds later, I'm feeling in some of the best shape of my adult life and feeling feeling very healthy, man. So, thank you. >> Well, that that's such such an honor to hear. Um and and look, kudos all goes to you, my friend. None to me, but I mean, I've met you in person, and I mean, you are you're you're a big guy. I mean, you're you're you're sizable, but but you're you're look great in general. Um I can only imagine just sort of how trim and muscular you got to be now given everything that you've been doing. Um but again I I I wanted just to end on that because I I think well I know from talking to you like me. Um we want people to get uh you know financially resilient and then financially prosperous for all the reasons that we mentioned. But we keep in mind that you know at the end of the day the money it it's it's just a means. It's not the end in of itself. and the things that really matter, friends, family, uh meaning in life, uh good health, and whatever. Those are the really important things to make sure you don't forget to invest in along the way. >> Amen. Spiritual health, physical health, financial health, spiritual health number one, physical health number two, financial health number three. If you can fix those things in that order, you're going to live a phenomenal life. And um I'm really blessed that you know someone who's lived a very very bad life, very very poor and hard hard life, you know, a lot of just a lot of hardship. You know, I've experienced a lot of hardship in my life. I'm really blessed to be on this side of it and I'm really blessed more more blessed to be, you know, helping uplift a lot of people to bring them to this side of it because it's it's it's pretty nice. >> Well Well, my friend, you've just done a great job of displaying why I have been uh such a huge fan of yours for so long. uh but also why I made the choice to uh to partner with you and and your company. Um and I just want to say Darius, I I really do hope that in a future video here, we can spend um some some real time uh going through again kind of your whole origin story. Um I think we might have talked about it once or twice in the past here, but I'm sure there are a lot of viewers here that haven't heard it. And I think it's a really important one for them to hear. Um because you you come from you know very humble origins and have had faced a lot of adversity uh from birth in your life. Uh but overcome it and um uh and not only overcome it but but jiu-jitsu that adversity uh into outperformance and and prospering not just for yourself but for everybody that you can touch and help influence. Um, and my friend, I think you you really do better than almost anybody I know sort of personify the old saying that it's um, uh, you we can't control what happens to us, but we can control how we respond to that. And I think your personal story is is just such an inspiring version of that. So anyways, my friend, I I hope we can get that uh uh some, you know, kind of again kind of a recap of of that whole origin story into one of our next your next appearances on here. Uh but that being said, my friend, I can't thank you enough again for doing everything that you you you normally do. um just given such a generous walkth through um really you know a torrent of insight uh and uh very actionable uh guidance there for folks that you've uh you've laid out for us here in this interview. Again, I can't thank you enough for coming and participating in my conference as well. Uh and very excited what the future holds uh for both of us with this new partnership. But uh yeah, my friend, thank you so much and can't wait for all that we'll do together in the future. >> Uh thank you so much, Adam. It was wonderful to be here with you and your audience and I'll see you at the conference in a couple weeks, man. Cheers. >> All right. Sounds wonderful, my friend. Thanks so much. Everybody else, thanks so much for watching.